Consumers were deceptively charged monthly fee, attorney general alleges
DES MOINES — All Iowans who purchased the “Miracle Scraper” ice scraper — including those unknowingly enrolled in an auto membership club — will receive complete refunds under a settlement reached with the Iowa Attorney General’s Office.
Iowa Attorney General Tom Miller sued Robert Alan Henry Schermerhorn of Dunedin, Fla., in August, alleging he violated the Iowa Buyer Club Memberships Law and engaged in deceptive and unfair billing practices violating the Iowa Consumer Fraud Act.
Schermerhorn sells the funnel-shaped plastic scraper on the internet for as little as $19.97 each. But consumers who purchased the item were automatically enrolled in a “VIP Auto Discount Club” and charged $9.95 a month without their consent, the Attorney General’s Office alleged.
More than 280 Iowans were signed up for the membership club and charged the monthly fee, according to information that Schermerhorn provided through a subpoena.
No Iowa consumers who were interviewed by a Consumer Protection Division investigator said they knew they were being enrolled in the auto club or even used its alleged benefits. Some consumers who noticed the monthly charges and canceled the membership continued to be charged, Miller’s office said.
The Better Business Bureau has more than 1,000 complaints from consumers across the United States who alleged similar fraudulent billing behavior. Iowa is the first and only state so far to take action against Schermerhorn.
Schermerhorn and his company, Italia Trading, LLC, denied the allegations but agreed to the consent judgment signed by Polk County District Judge David Nelmark on Friday.
Under the consent judgment, Schermerhorn and Italia Trading agree to:
permanently stop selling the Miracle Scrapers and auto club memberships to Iowa consumers and to cease fraudulently billing them;
reimburse every dollar that affected Iowans paid to Schermerhorn; and
pay $20,000 to the state’s Consumer Education and Litigation Fund.
Iowa consumers are not required to return the scraper to receive refunds. Iowans will receive a credit to their credit or debit card account, or a check to their last-known address. Schermerhorn and Italia Trading also agreed to pay the state an additional $30,000 if they fail to reimburse any eligible Iowa consumer as promised in the agreement.
Tips for consumers on buyer clubs
Check out the company first. The Better Business Bureau’s page for the “Miracle Scraper” gives it an “F” rating;
Be on alert if you hear you are being offered a free trial period. The company likely already has your credit or debit card number and will start billing you after the free period.
Many scams begin with “negative option” billing, which occurs when a consumer is automatically enrolled into a program and must “opt out” rather than “opt in” before being charged a recurring fee. When ordering merchandise online, be sure to review all pre-checked boxes and the fine print of the terms and conditions before submitting your order.
Always check your credit card bill or checking account. Be sure every charge is something you authorize and approve and immediately dispute the charge if it isn't something to which you consented or that you ordered.
Many scammers will charge small monthly fees — often under $10 — so that consumers do not notice the fraudulent billing on their monthly statements until much later after it began. Scammers may proceed to blame consumers for not complaining about the charges, even if the charges were illegitimate to begin with.
If you feel you were deceptively or unfairly enrolled into a program with a recurring monthly fee, contact the Iowa Attorney General’s Office:
Phone: 515-281-5926 (outside the Des Moines area, call toll-free: 888-777-4590)